The government in the UAE has taken several steps to digitalize the tax procedure and its payment process. In this scenario, FTA has introduced a new method of paying tax commonly known as GIBAN (Generated International Bank Account Number) to facilitate the VAT payment by persons registered under VAT.
A registered taxpayer can use this new option of GIBAN in addition to using e-Dirham and credit cards to pay VAT, fines, and penalties in the UAE.
In this article, we explain what GIBAN is and how to pay VAT using GIBAN for local transfer and international transfers. The experts at Now Consultant help businesses with VAT payments through GIBAN and also deal with all the VAT-related affairs in the UAE.
What is GIBAN?
GIBAN (Generated International Bank Account Number) is a unique code for VAT-registered taxpayers. You can use it to transfer money from specific UAE financial institutions, like banks or exchange houses, approved by the FTA. GIBAN is for paying VAT and Excise Tax, including any fines. But you cannot use it for other payments, like miscellaneous fees, etc.
How To Pay VAT Using GIBAN – Step By Step Process
Method 1: Direct Payment At Banks And Exchanges
Provide the bank or exchange the exact GIBAN number and the amount you need to pay the FTA for any VAT dues, interest, or penalties.
- Your payment might take up to 24 hours to show up, so it’s best to pay a day early to avoid a 2% penalty for missing the tax deadline.
- You might need to show your ID at the bank or exchange when making the transaction, so it is better to have it with you when you go to pay your VAT dues.
- It will be the cost of AED 15-25 for service charges depending on your transaction value.
Method 2. Paying Via Bank Transfer (GIBAN) – International Transfer
If you have an international bank account outside the UAE and you want to send money internationally to pay using GIBAN, here is the complete procedure that you need to follow::
Remember! For international transfer your bank should be a member of SWIFT.
1. Log in to e-Services and get your GIBAN from the dashboard. You will have separate GIBANs for VAT and Excise Tax.
2. Go to your bank and make the transfer with the teller.
3. Give your bank these details:
- Your GIBAN as the “Beneficiary IBAN”
- “Federal Tax Authority” as the “Beneficiary Name”
- “Federal Tax Authority” as the “Account with Institution”
- The Swift code ‘CBAUAEAAXXX’
- The amount you want to transfer in AED
4. Make sure to inform your bank to send the amount to the beneficiary in UAE. They might need to use an intermediary bank if necessary.
5. Your GIBAN will be checked, and the transaction will be processed. This usually takes 3-4 days. So, it is a better option to make the payment at least a week before the due date to avoid any penalties.
6. Afterward, log in to e-Services and go to the ‘My Payments’ tab to confirm that the transaction shows up in the ‘Transaction History’ box.
Paying On Time:
Make sure you pay your VAT and any overdue amount on time using GIBAN. You can pay the full amount or partial VAT payments, but if you choose the partial payments option, make sure you pay the complete dues before the due date to avoid penalties.
Our Services:
It is mandatory to pay the VAT payment and the amount of fines and penalties in time. Therefore, for fast and easy payment of VAT, you can use your GIBAN, if you are a registered taxpayer in the UAE. If you do not have any experience making your VAT payments through GIBAN, you need to hire the services of experts at Now Consultant.
We help you with VAT payments through local and international bank transfers with your GIBAN in compliance with the FTA regulations.
FAQs:
Is IBAN No & GIBAN Same?
A GIBAN is a unique IBAN that is provided to every registered taxpayer in the UAE to make fund transfers from certain financial institutions in the UAE. However, IBAN is provided by banks to the person for financial identification who opens an account in the banks
Is It Recommended To Pay VAT Through GIBAN?
Yes, it’s recommended to pay VAT through GIBAN. The FTA made paying VAT easier with GIBAN. Using it avoids extra fees and ensures timely payment to the FTA.
